The Safe Neighborhoods and Schools Act, enacted as an initiative statute by Proposition 47, as approved by the electors at the November 4, 2014, statewide general election, made various changes relating to theft and the possession of controlled substances, including by, among other things, generally reducing the penalty for those crimes, including reducing the penalty for possession of concentrated cannabis, establishing a procedure by which individuals convicted of those crimes prior to the passage of the act may petition for resentencing under the act, and creating the crime of shoplifting. The act also requires the Director of Finance to calculate the savings accruing to the state as a result of the implementation of the act and requires the Controller to transfer that sum from the General Fund to the Safe Neighborhoods and Schools Fund, which was created by the act. The act specifies the manner of distribution of those funds and the purposes for which they may be used.

This bill would repeal the changes and additions made by Proposition 47, except those related to reducing the penalty for possession of concentrated cannabis. This bill would provide that it would become effective only upon approval of the voters, and would provide for the submission of this measure to the voters for approval at the next statewide general election.

Date of Hearing: April 19, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 335

Author:(Alanis) – As Amended Ver:March 9, 2023

Urgency: No State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY:

This bill requires the Little Hoover Commission (Commission) to submit a report to the Legislature by January 1, 2026, on retail theft, shoplifting, and organized retail theft in California. The bill specifies the data and information to be included in the report and requires state and local law enforcement to collect and share the required information with the Commission.

FISCAL EFFECT:

1. General Fund costs of approximately $1.35 million over two years to the Commission to conduct the study. The Commission indicates this bill describes a far different kind of study than traditionally conducted by the Commission, making costs difficult to estimate, but notes the extensive data collection and analysis requirements are well beyond the traditional scope of the Commission’s work, staff expertise, and resources. Thus, the Commission anticipates needing to engage outside expertise through a research collaboration with the University of California or another partner. Additionally, as an independent agency, the Commission’s existing ongoing research agenda and advocacy of current policy recommendations will continue to comprise the bulk of staff workload, which means the Commission will need to make at least four additional staff hires to accommodate the work required by this bill.
2. Costs of an unknown, but likely substantial amount to local law enforcement to collect and provide data on retail theft to the Commission. These costs are potentially reimbursable by the state, subject to a determination by the Commission on State Mandates.

COMMENTS:

1. Purpose. According to the author:

This bill will provide clarity, on the impacts to businesses, including small businesses, and give us as lawmakers an opportunity to fairly and openly address potential deficits in the enactment of Proposition 47.

1. Proposition 47. Proposition 47 (2014), the Safe Neighborhoods and Schools Act, re-classified certain drug possession offenses and property offenses less than $950 from felonies or wobblers (alternate misdemeanor-felony) to straight misdemeanors, and created the misdemeanor offense of shoplifting. However, the measure limited these reduced penalties to offenders who do not have designated prior convictions for specified serious or violent felonies (also known as super strikes) and who are not required to register as sex offenders.
   
   Over the past three or four years, retailers have alleged reduced penalties have contributed to a substantial increase in shoplifting at retail locations – some thieves so brazen as to bring in bags to fill. However, research and even the retailers themselves now explain that many of these reports were overblown. According to the San Francisco Chronicle on January 5, 2023:

Data released by the San Francisco Police Department in October 2021 did not support Walgreens’ claim that unchecked theft had forced it to close five stores. On average, the ill-fated stores had recorded two shoplifting incidents a month from 2018 to their shuttering dates in 2021. While inventory amounting to 3.5% of the Walgreens total sales vanished last year, this year’s losses seemed to stabilize, hovering closer to the “mid twos.”

Furthermore, the Public Policy Institute of California found that in 2020, the property crime rate in California reached the lowest level observed since 1960. While it ticked up in 2021 by 2.4%, it remained historically low. Specifically, in 2021, property crime rose in 25 counties, including in San Francisco, which experienced the largest increase at 16.9%, and fell in eight of the state’s 15 largest counties, with Ventura’s 6.3% drop being the largest.

1. Little Hoover Commission. The Commission is an independent state oversight agency charged in statute with recommending policy changes that would provide “economy, efficiency and improved service” in state government. The Commission traditionally does this by holding public hearings, conducting staff research, and issuing written reports that outline its findings and recommendations. The Commission has a total staff of seven.

During the 2021-22 Legislative Session, the Commission produced 16 reports, including those recommending California do a better job facilitating equitable regional economic development, increase access to affordable housing, improve its approach to law enforcement training, improve children’s mental health care, and support workers impacted by the COVID-19 pandemic.

1. Related Legislation. AB 23 (Muratsuchi) amends Proposition 47 by reducing the threshold amount for petty theft and shoplifting from $950 to $400. AB 23 is pending in the Assembly Public Safety Committee, having been set three times and never heard.

AB 75 (Hoover) reinstates a provision of law repealed by Proposition 47 relating to petty theft with a prior conviction. AB 75 failed passage in the Assembly Public Safety Committee.

AB 329 (Ta) amends Proposition 47 to make petty theft or shoplifting by a person who is not a resident of this state a wobbler. AB 329 failed passage in the Assembly Public Safety Committee.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: March 7, 2023

Counsel: Liah Burnley

ASSEMBLY COMMITTEE ON

Reginald Byron Jones-Sawyer, Sr., Chair

ABPCA Bill Id:

Author:() – As Ver:

As Proposed to be Amended In Committee

SUMMARY: Requires the Little Hoover Commission (commission) to submit a report to the Legislature on retail theft, shoplifting, and organized retail theft in California. Specifically, this bill:

1. States that the report shall include all of the following:
   
   1. Information on retail thefts, shoplifting, and organized retail thefts reported to all state and local law enforcement agencies, including but not limited to:
      
      1. The number of reports made to each law enforcement agency;
         
      2. The size of the business, if known;
         
      3. The type of property reported stolen, if known; and,
         
      4. The monetary value of the property reported stolen, if known.
         
   2. Information on every state and local law enforcement agencies’ response to each report of retail theft, shoplifting, and organized retail theft, including but not limited to:
      
      1. The average amount of time taken by the law enforcement agency to respond to the report;
         
      2. Whether the reported theft was investigated by law enforcement;
         
      3. Whether an arrest was made in response to each report;
         
      4. Whether a citation was made in response to each report, and if so which; and,
         
      5. Whether the investigating law enforcement referred the matter to the district attorney for prosecution.
         
   3. Information on actions of district attorneys who received reports of retail thefts, shoplifting, and organized retail thefts from law enforcement agencies including:
      
      1. Whether they filed criminal charges in each case; and
         
      2. If charges were not filed, the extent to which this was due to the district attorney’s determination that there was insufficient evidence to prosecute the offense, policies relating to the prioritization of filing charges in these types of cases, or due to some other reason.
         
   4. Countywide statistical information on theft, shoplifting, and organized retail theft, including but not limited to:
      
      1. The number of reports made to law enforcement in each county;
         
      2. The number of arrests made in each county;
         
      3. The number of citations given in each county;
         
      4. The number of cases referred to the district attorney for prosecution of theft, shoplifting, and organized retail theft in each county; and,
         
      5. The disposition of each case referred to the district attorney for prosecution in each county.
2. Requires the commission to include any findings and recommendations relating to laws, policies, and practices regarding retail theft, shoplifting, and organized retail theft in California in the report.
3. Requires state and local law enforcement agencies to collect and share the required information with the commission for the purpose of the report.
4. Requires the commission shall provide the report to the Legislature no later than January 1, 2026.
5. Sunsets these provisions on January 1, 2027.
   

EXISTING LAW:

1. Establishes the commission and provides that the commission shall be composed of thirteen members as specified. (Gov. Code, § 8501.)
   
2. Provides that it is the purpose of the commission, to secure assistance for the Governor and the Legislature in promoting economy, efficiency, and improved service in the transaction of the public business in the various departments, agencies, and instrumentalities of the executive branch of the state government, and in making the operation of all state departments, agencies, and instrumentalities, and all expenditures of public funds, more directly responsive to the wishes of the people as expressed by their elected representatives. (Gov. Code, § 8521.)
   
3. Defines “shoplifting” as entering a commercial establishment with intent to commit theft, while that establishment is open during regular business hours, where the value of the property that is taken or intended to be taken does not exceed $950. Shoplifting shall be punished as a misdemeanor, except that shoplifting may be punished as a felony if a person has a prior “super strike,” or a registerable sex conviction, as specified. (Pen. Code § 459.5 subd. (a).)
   
4. Specifies that any other entry into a commercial establishment with intent to commit theft is burglary. Burglary in the first degree is a felony; burglary in the second degree is a wobbler (an alternate felony/misdemeanor). (Pen. Code §§ 459.5 subd. (a) & 461.)
   
5. Defines “Grand theft” as theft that is committed when the money, labor, or real or personal property taken is of a value exceeding $950, except as specified. Grand theft is a wobbler (an alternate felony or misdemeanor). (Pen. Code, §§ 487 & 489, subd. (c).)
6. Defines “Petty theft” as obtaining any property by theft where the value of the money, labor, real or personal property taken does not exceed $950. Petty theft is a misdemeanor, punishable by a fine not exceeding $1,000 or by imprisonment in the county jail not exceeding 6 months, or both. Petty theft does not include any theft that may be charged as an infraction. (Pen. Code, §§ 490 & 490.2.)
   
7. Provides that the offense of petty theft with a prior is a wobbler. (Pen. Code, § 666, subd. (a).)
   
8. Defines “organized retail theft” as any person who acts in concert with other persons to steal merchandise from a merchant with the intent to sell, exchange, or return the merchandise for value; to receive, purchase or possess merchandise knowing or believing it to have been stolen; or, as a part of an organized plan to commit theft. Organized retail theft is punishable as a wobbler. (Pen. Code, § 490.4.)
   
9. States that the authority of peace officers extends to any place in the state as to a public offense committed, for which there is probable cause to believe has been committed, as specified. (Pen. Code, § 830, et seq.)
   
10. Authorizes peace officers to make an arrest for the commission of a felony or a misdemeanor. (Pen. Code, §§ 840, 834 et seq.)
    
11. Permits a peace officer to take a person into custody rather than releasing them on their own recognizance if, among other reasons, a person has been cited, arrested, or convicted for misdemeanor or felony theft from a store in the previous six months, or when there is probable cause to believe that the person arrested is guilty of committing organized retail theft. (Pen. Code, § 853.6.)
    
12. Allows a bench warrant to be issued where the person has been cited or arrested for misdemeanor or felony theft from a store and has failed to appear in court in connection with that charge or those charges in the previous six months. (Pen. Code, § 978.5.)
    
13. Authorizes a city or county prosecuting attorney or county probation department to create a diversion or deferred entry of judgment program for persons who commit a theft offense or repeat theft offenses. (Pen. Code, § 1001.81.)
    
14. Requires the Department of the California Highway Patrol (CHP) to coordinate with the Department of Justice (DOJ) to convene a regional property crimes task force to identify geographic areas experiencing increased levels of property crimes, including organized retail theft, and assist local law enforcement with resources, such as personnel and equipment. (Pen. Code, § 13899.)
    

FISCAL EFFECT:

Unknown

COMMENTS:

1. Author’s Statement: According to the author, “California businesses have faced unintended adverse impacts under Proposition 47. There is very little aggregated information available as to the full extent of those impacts. Business owners, including minority businesses owners, expect the laws to work for them in protecting their person, property and way of life. Failure to deliver on those expectations erodes the trust they have for their government and in law enforcement. AB 335 will provide clarity, on the impacts to businesses, including small businesses, and give us as lawmakers an opportunity to fairly and openly address potential deficits in the enactment of Proposition 47.”
   
2. Reforms Made by Proposition 47: In the November 4, 2014 election, California voters approved Proposition 47, with 59.6% of the vote, which became effective the following day. (California Secretary of State (“SOS”), Statement of the Vote at p. 93 <https://elections.cdn.sos.ca.gov/sov/2014-general/pdf/2014-complete-sov.pdf> [as of Feb. 16, 2023].) The purpose of Proposition 47 is to “ensure that spending focused on violent and serious offences and to maximize alternatives for nonserious, nonviolent crime” and to invest the savings into “prevention and support programs for schools, victims services, and mental health and drug treatment.” (SOS, Voter Guide, Proposition 47, Section 2 at p. 70 <https://vig.cdn.sos.ca.gov/2014/general/pdf/text-of-proposed-laws1.pdf> [as of Feb. 16, 2023].)
   
   Proposition 47 amended various provisions of the Government Code, Penal Code and Health and Safety Code to reclassify certain drug possession offenses and property offenses less than $950 from felonies or wobblers to misdemeanors, and created the misdemeanor offense of shoplifting. However, the measure limited these reduced penalties to offenders who do not have designated prior convictions for specified serious or violent felonies (super strikes) and who are not required to register as sex offenders. (Ibid.)
3. Proposition 47 and Crime Rates: Opponents of Proposition 47 claim that there is an increase in crime attributable to the initiative. However, reports evaluating the effects of the initiative have found that Proposition 47 has had little to no effect on California’s crime rates overall. (KQED, California Prison Reform Didn't Cause Crime Increase, Study Finds <https://www.kpcc.org/2016-02-18/study-cas-prison-reform-didnt-cause-crime-increase>[as of Feb. 16, 2023]; see also, Center on Juvenile and Criminal Justice, Urban Crime Trends Remain Stable Through California’s Policy Reform Era (2010-2016) <http://www.cjcj.org/uploads/cjcj/documents/urban_crime_trends_remain_stable_through_californias_policy_reform_era_2010-2016.pdf> [as of Feb. 16, 2023].) Incarceration and crime rates are all down substantially compared to their levels in 2006 – shortly before state policymakers and the voters began enacting reforms to California’s criminal justice system. (Criminal Justice Reform is Working in California, California Budget & Policy Center <https://calbudgetcenter.org/resources/criminal-justice-reform-is-working-in-california/> [as of Feb. 16, 2023].)
   

In 2020, the property crime rate in California reached the lowest level observed since 1960. While it ticked up in 2021 by 2.4%, it remained low. Property crime rose in 25 counties in 2021—San Francisco saw the largest increase, by 16.9%. On the other hand, property crime fell in 8 of the 15 largest counties, with Ventura’s 6.3% drop being the largest. (PPIC, Crime Trends in California <https://www.ppic.org/publication/crime-trends-in-california/> [as of March 2, 2023].)

Moreover, a study by the Pew Research Center found that raising the felony theft threshold in other states had no impact on crime; states that increased their thresholds reported roughly the same average decrease in crime as the 20 states that did not change their theft laws; and the amount of a state’s felony theft threshold—whether it is $500, $1,000, $2,000, or more—is not correlated with its property crime and larceny rates. (Pew Research Center, The Effects of Changing Felony Theft Thresholds <https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2017/04/the-effects-of-changing-felony-theft-thresholds> [as of Feb. 16, 2023].)

Research also suggests that Proposition 47 has had no effect on violent crimes, including homicide, rape, aggravated assault and robbery and findings of increased property offenses such as larceny and motor vehicle theft that blame Proposition 47 as the cause do not withstand more rigorous statistical testing. (Bartos, Bradley J. & Kubrin, Charis E., Can We Downsize Our Prisons and Jails without Compromising Public Safety? (2018) 17 Criminology & Public Policy 3 <https://onlinelibrary.wiley.com/doi/10.1111/1745-9133.12378 > [as of Feb. 16, 2023].)

1. Reports of Exaggerated Losses by Retailers: Some complaints of retail theft were overstated. For example, in 2021, Walgreens closed five stores in San Francisco purportedly due to retail theft. However, the San Francisco Police Department’s data on shoplifting did not support this explanation for the closures. Recently, the chief financial officer of Walgreens acknowledged the shoplifting threat had probably been overstated. The company likely spent too much on security measures and mischaracterized the amount of theft at stores. In fact, shrinkage (the inventory that was bought but could not be sold primarily due to shoplifting) actually decreased to around 2.5 to 2.6 percent of sales, compared to 3.5 percent the prior year. (See New York Times, Walgreens Executive Says Shoplifting Threat Was Overstated (Jan. 6, 2023) <https://www.nytimes.com/2023/01/06/business/walgreens-shoplifting.html> [as of March 2, 2023]; see also Los Angeles Times, Retailers Say Thefts Are at Crisis Level. The Numbers Say Otherwise (Dec. 15, 2021) <https://www.latimes.com/‌business/story/2021-12-15/organized-retail-theft-crime-rate> [as of March 2, 2023]; CNN Business, ‘Maybe We Cried Too Much’ Over Shoplifting, Walgreens Executive Says (Jan. 7, 2023) <https://www.cnn.com/2023/01/06/business/walgreens-shoplifting-retail/index.html> [as of March 2, 2023]; The Atlantic, The Great Shoplifting Freak-Out (Dec. 203, 2021) <https://www.theatlantic.com/health/archive/2021/12/shoplifting-holiday-theft-panic/621108/> [as of March 2, 2023].)
   
2. Recent Legislation Targeting Reports of Increased Theft: The crime of organized retail theft was created by AB 1065 (Jones-Sawyer), Chapter 803, Statutes of 2018. AB 1065 also authorized CHP to establish regional task forces to investigate property theft crimes. AB 1065 contained various provisions expanding jurisdiction to prosecute theft, organized retail theft and receipt of stolen property; authorizing nonrelease of individuals arrested for misdemeanors when certain circumstances are present; specifying that a court may issue a bench warrant for a person who failed to appear if the defendant has been cited or arrested for a theft offense in the previous 6 months; and authorizing the creation of a diversion or deferred entry of judgment program for persons who commit theft and repeat theft offenses. AB 1065 contained a sunset date of January 1, 2021.
   
   Subsequently, AB 331 (Jones-Sawyer), Chapter 113, Statutes of 2021, reenacted the provisions of the original bill that created the crime of organized retain theft. AB 331 contains a sunset date of January 1, 2026. AB 2294 (Jones-Sawyer), Chapter 856, Statutes of 2022, authorized the misdemeanor arrest of a person that has a prior arrest, citation or conviction for theft, as specified, and provisions of AB 1065 that had authorized nonrelease of individuals arrested for misdemeanors when certain circumstances are present; specifying that a court may issue a bench warrant for a person who failed to appear if the defendant has been cited or arrested for a theft offense in the previous 6 months; and authorizing the creation of a diversion or deferred entry of judgment program for persons who commit repeat theft offenses but also expanded to apply to single theft offenses. AB 2294 contains a sunset date of January 1, 2026.

In addition, AB 2356 (Rodriguez), Chapter 22, Statues of 2022, specified that if the value of the money, labor, real property, or personal property taken exceeds $950 over the course of distinct but related acts, whether committed against one or more victims, the value of the money, labor, real property, or personal property taken may properly be aggregated to charge a count of grand theft, if the acts are motivated by one intention, one general impulse, and one plan. According to the Assembly Public Safety Analysis of AB 2356, the intent of the bill was to “codify existing case law, People v. Bailey (1961) 55 Cal.2d 514, 518-519 to “clarify the state of the law to the extent some prosecutors may think Proposition 47 changed the Bailey rule.”

1. Need for this Bill: In the post-Proposition 47 debate, law enforcement officers say they no longer can arrest people for thefts and prosecutors claim they cannot prosecute the offenses. And, because arrests are down, they contend that crime in California is increasing, resulting in increases in thefts and property offenses. (Los Angeles Times, Opinion: California’s Prop. 47 Revolution: Why Are Police Refusing To Make Misdemeanor Arrests? <https://www.latimes.com/opinion/opinion-la/la-ol-proposition-47-falsehoods-arrest-20151027-story.html> [as of March 2, 2023].)

Supporters of Proposition 47 respond that crime rates fluctuate for a number of factors, and that rising crime in cities outside California shows that there is not necessarily a causal link between crime and Proposition 47. Further, all the same procedures and remedies that were available before the proposition took effect are still available, except that jail sentences for those specified crimes may be reduced in certain circumstances. (Ibid)

Given that critics of the initiative believe that crime is rising because law enforcement will not make arrests and people will not be prosecuted for their offenses, it is important for the Legislature to understand to what extent law enforcement and prosecutors are failing to respond to reports of thefts. To shed light on this issue, this bill would require the commission to submit a report to the Legislature on retail theft, shoplifting, and organized retail theft in California, including specific metrics about the number of reports of thefts made, and the response made by every state and law enforcement agency and prosecutors to each reported theft.

1. Argument in Support: According to the Modesto Chamber of Commerce, “Since the approval of Prop 47, crime has significantly increased, especially theft and shoplifting, which has dramatically impacted our residents and business community. We have heard from our small business community their frustration with shoplifters. Many of these businesses have stopped reporting theft entirely. Due to staffing shortages and difficulty recruiting, law enforcement agencies have struggled to respond to every reported crime, Proposition 47 has just made that worse. Shoplifting is not a victimless crime, nor insignificant. Business owners and residents should be able to count on the law working for them, and law enforcement agencies should be provided the tools they need to ensure victims are provided justice.”
   
2. Argument in Opposition: According to Californians for Safety and Justice, “Prop. 47 did not affect serious or violent felonies, but instead targeted low-level property and drug offenses for reform. Political rhetoric notwithstanding, since its enactment, property crime has decreased in California. Not dissuaded, in 2020, “tough on crime” advocates tried to persuade the public to repeal Prop. 47 via Prop. 20. Again, California voters rejected the attempt to go back to mass incarceration.”
   
3. Related Legislation:
   
   1. AB 23 (Muratsuchi), would amend Proposition 47 by reducing the threshold amount for petty theft and shoplifting from $950 to $400. AB 23 has been permanently pulled by the author. .
      
   2. AB 75 (Hoover), would reinstate a provision of law that was repealed by Proposition 47 relating to petty theft with a prior. AB 75 failed passage in this Committee.
      
   3. AB 329 (Ta), would amend Proposition 47 to make petty theft or shoplifting by a person who is not a resident of this state a wobbler. AB 329 is pending hearing in this Committee.
      
   4. SB 316 (Niello), would reinstate a provision of law that was repealed by Proposition 47 relating to petty theft with a prior. SB 316 is pending in Senate Public Safety Committee.
      
4. Prior Legislation:
   
   1. AB 2294 (Jones-Sawyer), Chapter 856, Statutes of 2022, authorized the misdemeanor arrest of a person that has a prior arrest, citation or conviction for theft, as specified.
      
   2. AB 2356 (Rodriguez), Chapter 22, Statues of 2022, expanded the definition of “grand theft” where the aggregate amount taken by all participants exceeds $950.
      
   3. AB 1065 (Jones-Sawyer), Chapter 803, Statutes of 2018, created the crime of organized retail theft and expanded jurisdiction to prosecute cases of theft or receipt of stolen merchandise.
      
   4. Proposition 47 of the November 2014 general election, the Safe Neighborhoods and Schools Act, reduced penalties for certain drug and property crimes.
      

REGISTERED SUPPORT / OPPOSITION:

Support

Arcadia Police Officers' Association

Burbank Police Officers' Association

California Coalition of School Safety Professionals

California District Attorneys Association

California State Sheriffs' Association

Claremont Police Officers Association

Corona Police Officers Association

Culver City Police Officers' Association

Fullerton Police Officers' Association

Inglewood Police Officers Association

Los Angeles School Police Officers Association

Modesto Chamber of Commerce

Newport Beach Police Association

Palos Verdes Police Officers Association

Placer County Deputy Sheriffs' Association

Pomona Police Officers' Association

Riverside County Sheriff's Office

Riverside Police Officers Association

Riverside Sheriffs' Association

Santa Ana Police Officers Association

Take a Stand Stanislaus

Turlock Associated Police Officers

Upland Police Officers Association

7 Private Individuals

Opposition

California Attorneys for Criminal Justice
California Public Defenders Association (CPDA)
Californians for Safety and Justice
Communities United for Restorative Youth Justice (CURYJ)
Defy Ventures
Drug Policy Alliance
Ella Baker Center for Human Rights
Friends Committee on Legislation of California
Initiate Justice
Last Prisoner Project
Miracles Counseling Center
Rubicon Programs
Santa Cruz Barrios Unidos INC.
Universidad Popular

2 Private Individuals

Analysis Prepared by: